A human artificial chromosome (HAC) vector was constructed from a 1 megabase yeast artificial chromosome (YAC) that was isolated by screening a randomly chosen subset of the CEPH YAC library for alpha satellite DNA. This YAC was modified to contain human telomeric DNA and a putative origin of replication from the human b-globin locus. The resultant HAC vector was introduced into human cells by lipid-mediated DNA transfection, and HACs were identified which were mitotically stable in the absence of selection for at least 100 generations. Microdissected HACs used as FISH probes localized to the HAC itself and not to the arms of any endogenous human chromosomes, suggesting that the HAC was not formed by telomere fragmentation. After transfer to mouse cells, the HACs were mitotically unstable in the absence of selection, suggesting that there may be important functional differences between human and mouse chromosomes. In addition to the formataion of HACs, one fate of the HAC DNA was integration into the host cell genome leading us to question the functionality of the telomeres. In an effort to improve the rate at which the HAC DNA seeds functional telomeres, we are assessing whether the yeast telomeric sequences which are added to the HAC during propagation, adversely affect the efficieny of HAC formation. We have propagated our HAC vector in a yeast strain with a modified telomerase template which can add human telomeric DNA to the ends of the vector and will assess the rate of HAC formation. Our ability to manipulate the HAC vector by recombinant genetic methods in yeast should help to further define the elements necessary for human chromosome function.